Applovin Corp FY2024 Q3 Shareholder Letter
Download PDFNov, 2024 3Q 24
7 L E V I L S P H I V
0 I X X I V
To Our AppLovin
Shareholders:
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Financial Guidance Summary 2
4Q24
Total Revenue $1,240 to $1,260 million
Adjusted EBITDA $740 to $760 million
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2
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Re Zenue
$ millions
$ millions
Adjusted EBITDA
$ millions, as a % of re Zenue
Adjusted EBITDA
$ millions
Outstanding
$ and shares in millions
13
Financial O Zer Ziew
ALL COM PARISONS ARE TO 3Q23 UNLESS OTHERWISE NOTED .
Note: Totals may not sum due to rounding
1
Adjusted EBITDA, Adjusted EBITDA margin, and Free Cash Flow are non-GAAP measures. Please see “Non-GAAP Financial Measures” and the reconciliation from GAAP to non-GAAP measures in the Appendix. Cash Flow from Operations
Free Cash Flow Net Income
Shares Outstanding Adjusted EBITDARe Zenue was $1.20 Fillion , an increase of 39% . Net Income was $434 million , a net margin of 36%
compared to a net income of $109 cmillion and a net
margin of 13% .
Software Platform re Zenue grew 66% to $835 cmillion .
Segment Adjusted EBITDA increased 79% to
$653 cmillion , a 78% Adjusted EBITDA margin. Adjusted EBITDA increased 72% to $722 cmillion , an
Adjusted EBITDA margin of 60% .
Apps re Zenue grew 1% to $363 cmillion . Segment
Adjusted EBITDA increased 24% to $68 cmillion , a 19%
margin. Cash Flow: We generated $551 cmillion of net cash from
operating acti Zities and $545 cmillion of Free Cash Flow.
As % Re Zenue
Software Platform Update
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millions
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Adam Foroughi , CEO Matt Stumpf, CFO
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Appendix
This shareholder letter contains forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking
statements generally relate to future events or our future financial or operating performance. In
some cases, you can identify forward-looking statements because they contain words such as
“may,” “will,” “should,” “expect,” “plan,” “anticipate,” “going to,” “could,” “intend,” “target,”
“project,” “contemplate,” “believe,” “estimate,” “predict,” “potential,” or “continue,” or the
negative of these words or other similar terms or expressions that concern our expectations,
strategy, priorities, plans, or intentions. Forward-looking statements in this letter to shareholders
include, but are not limited to, statements regarding our future financial performance, including our
expected financial results and guidance, and growth prospects; statements regarding our share
repurchase program, including any future authorized increases to the amount available under our
program; our long-term goals; our expectations regarding improvements to our AXON technology;
our expectations regarding trends impacting our Software Platform; our expectations regarding the
benefits of our Software Platform to and the growth of our advertising partners; our expectations
regarding the growth of our advertising partners, the growth of advertising spending and the
advertising ecosystem; our expectations regarding our capital allocation plans; our expectations on
our cost management efforts, as well as, our plans for user acquisition spend in our Apps segment.
Our ability to increase the amount authorized under our share repurchase program, and to utilize
any amounts authorized, will depend on a variety of factors, including compliance with legal
requirements, such as solvency and surplus requirements; contractual restrictions, as may be set
forth in our credit facility or any future debt or other applicable agreements; market conditions; our
capital allocation strategy; and our other capital requirements from time to time, including any
strategic acquisitions and partnerships we may undertake. Over time, we may modify our capital
allocation strategy or pursue alternative objectives and strategies. Our expectations and beliefs
regarding our share repurchase program and the other forward looking statements contained in this
letter may not materialize, and actual results in future periods are subject to risks and uncertainties,
including changes in our plans or assumptions, which could cause actual results to differ materially
from those projected. These risks include our inability to forecast our business effectively, the
macroeconomic environment, fluctuations in our results of operations, our ability to execute on our
operational and financial priorities, our ability to scale our Software Platform to support new users
or verticals, our ability to continue to develop our AXON technology as well as expand into new
supply and demand verticals, the competitive advertising and mobile app ecosystems, and our
inability to adapt to emerging technologies and business models. The forward-looking statements
contained in this letter are also subject to other risks and uncertainties, including those more fully
described in our Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2024.
Additional information will also be set forth in our Quarterly Report on Form 10-Q for the fiscal
quarter ended September 30, 2024. The forward-looking statements in this letter are based on
information available to us as of the date hereof, and we disclaim any obligation to update any
forward-looking statements, except as required by law.
AppLovin Corporation 3Q24 Shareholder Letter 6
Non-GAAP Financial Metrics
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Key Metrics
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Quarterly Key Metrics
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lnmdshyhmf d Dbg L $O-
3Q 2024 3Q 2023
Monthly Active Payers (millions) 1.
Average Revenue per Monthly Active Payer (ARPMAP) 4
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AppLovin Corporation
Condensed Consolidated Balance Sheets
in thousands, e \cept for share and per share data
2 2 Decem Fer ,
2 2
Assets
Current assets
Cash and cash e Uuivalents
, 2, 2
Accounts receiva Fle, net
, , ,
Prepaid e \penses and other current assets
2 , ,2
Total current assets
, , 2 , ,
Property and e Uuipment, net
, 2 ,
Goodwill
, 2,2 , 2,
Intangi Fle assets, net
, 2 , ,2 2,
Other assets
, ,2
Total assets
, 2, , ,
Lia Filities and stoc OholdersT e Uuity
Current lia Filities
Accounts paya Fle
2 , , 2
Accrued and other current lia Filities
2 ,2 2 ,
Short term de Ft
, 2 ,
Deferred revenue
, ,
Total current lia Filities
, , 22
Long term de Ft
, , 2, ,
Other non current lia Filities
2 ,2 2 2,
Total lia Filities
, ,2 , 2,
Stoc OholdersT e Uuity
Preferred stoc O, par valueR , , shares authori ^ed, no
shares issued and outstanding as of Septem Fer c , 2 2 and Decem Fer c ,
2 2
R R
Class A and Class B Common Stoc O, par valueR , , ,
Class A , , , and Class B 2 , ,
shares authori ^ed,
, , Class A 2 , , and Class B , 2 ,
and , , 2
Class A 2 , , and Class B , 2, 22
shares issued and
outstanding as of Septem Fer c , 2 2 and Decem Fer c , 2 2 ,
respectively
Additional paid in capital
2, 2, ,
Accumulated other comprehensive loss
,
,2
Retained Earnings Accumulated deficit
2,
Total stoc OholdersT e Uuity
,2 ,2 , 2
Total lia Filities and stoc OholdersT e Uuity
, 2, , ,
$oo /nuhm Bn Uon U Dshnm 2P Rg D Udgn Ocd U /dssd U
AppLovin Corporation
Condensed Consolidated Statements of Operations
in thousands, e \cept share and per share data
Nine Months Ended
Septem Fer , Septem Fer ,
2 2 2 2 2 2 2 2
Revenue , ,2 ,2 , , 2, 2 , 2
Costs and e \penses
Cost of revenue 2 , 2 , , ,
Sales and mar Oeting 2 , 2 2, 2 , ,
Research and development , ,2 ,2 ,
General and administrative , ,2 2 , ,2
Total costs and e \penses , , 2, , , ,
Income from operations , , ,2 , ,
Other income e \pense
Interest e \pense ,2
,
22 ,
2 ,
Other income, net , , , 2 , 2
Total other e \pense, net ,2
,
2 ,
,
Income Fefore income ta \es , ,22 , , 2 ,
Provision for income ta \es ,2 , ,
Net income , 2 , , 2 ,
Less Net income attri Futa Fle to participating securities 2, 2
Net income attri Futa Fle to common stoc ORBasic , , , ,
Net income attri Futa Fle to common stoc ORDiluted , , , ,
Net income per share attri Futa Fle to Class A and Class B
common stoc Oholders
Basic 2 2 2
Diluted 2 2
;eighted average common shares used to compute net income
per share attri Futa Fle to Class A and Class B common
stoc Oholders
Basic , ,2 , , , , 2 , ,
Diluted ,22 , , ,222 ,2 2, ,2 ,
$oo /nuhm Bn Uon U Dshnm 2P Rg D Udgn Ocd U /dssd U
AppLovin Corporation
Condensed Consolidated Statements of Cash Flows
in thousands
Septem Fer ,
2 2 2 2
Operating Activities
Net income
, 2 ,
Adjustments to reconcile net income to operating activities
Amorti ^ation, depreciation and write offs
2 , ,
Stoc O Fased compensation
2 , 2 ,
Other
,22 2 , 2
Changes in operating assets and lia Filities
Accounts receiva Fle
2 ,
,
Prepaid e \penses and other assets
, 2 ,
Accounts paya Fle
, ,
Accrued and other lia Filities
,
,
Net cash provided Fy operating activities
, , , 22
Investing Activities
Purchase of non mar Oeta Fle e Uuity securities
,
,
Ac Uuisition of intangi Fle assets
,2
,
Other investing activities
,
2,2
Net cash used in investing activities
,
, 2
Financing Activities
Repurchases of stoc O
, 2
, ,
Principal repayments of de Ft
,
,
Payment of withholding ta \es related to net share settlement of e Uuity awards
, 2
,
Payments of licensed asset o Fligation
R ,2
Proceeds from issuance of de Ft
, 2, ,2
Proceeds from issuance of common stoc O upon e \ercise of stoc O options and
purchase of ESPP shares
2 , ,
Other financing activities
,
2,2
Net cash used in financing activities
,22 ,
, 2,2
Effect of foreign e \change rate on cash and cash e Uuivalents
2,22
Net increase decrease
in cash and cash e Uuivalents
, ,
Cash and cash e Uuivalents at Feginning of the period
2, 2 , ,
Cash and cash e Uuivalents at end of the period
, 2,
$oo /nuhm Bn Uon U Dshnm 2P Rg D Udgn Ocd U /dssd U
AppLovin Corporation
Reconciliation of Net Cash Provided By Operating Activities to Free Cash Flow
in thousands
for the periods presented
Three Months Ended
52 52 52 2 52 52
Net cash provided Fy operating activities , , 2, , 2 , 2
Less
Purchase of property and e Uuipment
2
22
, 2
Principal payments on finance leases
,2
,
,
,
,
Free Cash Flow , , , , ,
Net cash used in investing activities ,
,
,
,
,
Net cash used in financing activities 2 ,
, 2
2 , 2
,
,
$oo /nuhm Bn Uon U Dshnm 2P Rg D Udgn Ocd U /dssd U
AppLovin Corporation
Reconciliation of Net Income to Adjusted EBITDA
in thousands
margin and a reconciliation of Net Income to Adjusted EBITDA for the periods presented
Three Months Ended
52 52 52 2 52 52
Revenue ,2 ,2 , , , , , ,2
Net income , 2,2 2 , , , 2
Mds L D Ufhm 2 2
Interest e \pense , , , 2 , ,2
Other income
e \pense, net
, 2 ,
,2
,
Provision for income ta \es , , 2 ,2 ,2
Amorti ^ation, depreciation and write offs 2 , , 2, , ,
Loss on disposal of long lived assets R R , R R
Non operating foreign e \change loss gain
Stoc O Fased compensation , , ,2 , 2 ,
Transaction related e \pense
2 2 2
Restructuring costs R R R , 2 2,
Total adjustments , 2 , 22 2, 2 ,22 2 ,
Adjusted EBITDA ,2 , , , 2 ,
$citrsdc DA ,SC $ L D Ufhm
$oo /nuhm Bn Uon U Dshnm 2P Rg D Udgn Ocd U /dssd U 2
AppLovin Corporation
Segment Information
in thousands
52 52 52 2 52 52
Revenue
Software Platform
, 2 , , , ,
Apps
, , 2 , , ,
Total Revenue
,2 ,2 , , , , , ,2
Segment Adjusted EBITDA
Software Platform
, 2 , 2, 2 2 , 2 ,
Apps
, , , , 2 ,22
Total Segment Adjusted EBITDA
,2 , , , 2 ,
Interest e \pense
,
,
, 2
,
,2
Other income e \pense
, net
, 2
, ,2 ,
Amorti ^ation, depreciation and write offs
2 ,
,
2,
,
,
Loss on disposal of long lived assets
R R ,
R R
Non operating foreign e \change gain loss
Stoc O Fased compensation
,
,
,2
, 2
,
Transaction related e \pense
2
2
2
Restructuring costs
R R R , 2
2,
Income c Fefore provision for ta \
,22 , 2 , 2 ,2 ,
Segment Adjusted EBITDA Margin
Software Platform
2
Apps
22
$oo /nuhm Bn Uon U Dshnm 2P Rg D Udgn Ocd U /dssd U
